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I think the biggest cost in this business is the human component. For that all you need to do is check the price difference between renting for a day or getting

I think the biggest cost in this business is the human component. For that all you need to do is check the price difference between renting for a day or getting taxi for a day. Given a choice, Uber would love to be the first to have self driving cars. Once they do that their business model scales predictably with capital. Whoever gets self driving technology right, will own all transportation and logistics - which is huge! However, I doubt they can do it. The quality of engineering talent is subpar compared to Google. Given that they couldn't compete with R&D they probably resorted to other means.

bduerst 9y ago
I think Matt Levine succinctly said it best: >Eventually there will be self-driving cars, and there's no special reason to think that Uber will be the best at building them, or that its dominant position in the ride-hailing-app space will protect it from better self-driving-car businesses.
- timewarrior 9y ago
  Agreed. Unless they have a monopoly on self driving technology (which I seriously doubt). On the other hand, I feel that we will not have self driving cars for a really long time. Instead I believe we will have flying cars before that, who will solve the last mile problem. They will take you from the house to the hub and hub to the final destination. Buses can transport people between hubs. With self driving cars you need to deal with existing regulations, traffic rules, other drives on road, people jaywalking, animals running into you. However with flying cars - you literally have exponentially more roads in air (which don't even have to be built). No existing regulations (unless at risk of being in flight path). Technology is already there (make drones bigger). These drones will communicate using MESH networks leading to lesser risk of collisions. I also feel that Elon Musk is doing something really smart with The Boring Company. If he can dramatically reduce the cost of building tunnels (like he did with space travel) - he could build a lot of underground roads at a lower cost and faster pace than roads on surface. No need to deal with buying out land and getting approvals. Imagine if these tunnels are exclusive to Tesla cars, who can auto-drive these tunnels for long distances. No need to worry about other cars, animals, rain, snow, traffic regulations. All the problems that auto driving cars are facing now, will go away. Multiple Tesla cars will communicate with each other using MESH network. Teslas could be driving in these tunnels at 150+ mph and discharged cars could be swapped with charged cars on the way. Drivers might need to take over minimally just for the last mile. If a tunnel like this could be built between SF to LA. It could be faster door to door vs flight. To get started, a tunnel from SF to really South Bay could have an huge impact on the commute. I do not have much experience of these industries. So these are my hypotheses. Would love to know what others think!
  - enraged_camel 9y ago
    >>On the other hand, I feel that we will not have self driving cars for a really long time. Instead I believe we will have flying cars before that, who will solve the last mile problem. We already have flying cars. They are called helicopters, and they are only available to various government agencies, large corps and the rich.
  - abpavel 9y ago
    > No existing regulations (unless at risk of being in flight path). Obviously you haven't had your flight lessons yet. Not only there are scores of airspace regulations, but flying is a much harder task to do as well. The freedom you're thinking off is akin to freely driving in a 4x4 on an open ranch, which has more to do with joy, and less with transportation needs.
    - deleted 9y ago
      [deleted]
  - Animats 9y ago
    tunnel from SF to South Bay I have a copy of the 1960 U.S. Corps of Engineers plan for the Bay Area. It totally predates environmentalism, and they were thinking big. They proposed five freeways on the SF peninsula - US 101, I-280, CA-1, CA-35, and one out in the bay on stilts. There's a second Bay Bridge at Candlestick. The area south of the Dumbarton bridge was to be filled in and developed. Marin was planned as a heavy industry center, with steel mills at Tiburon. There was considerable WWII heavy industry in the north bay, including big shipyards, and the Corps thought that would grow, not shrink. The SF peninsula would be a center for "business machines". They got that right.
  - nihonde 9y ago
    I would settle for a system that takes over control of otherwise regular cars on highways and in congested areas.
SilasX 9y ago
But note that Uber doesn't become superprofitable from SDCs unless they're the only ones with them; otherwise, they have to cut prices in line with the other SDC-ride-hailing apps. Even under an optimistic scenario, might have a two-year SDC monopoly, after which others can offer the same product. That's still not nearly long enough to justify the valuation.
- yawaworht12 9y ago
  No company is going to have a monopoly of self driving cars. Uber just needs to get them at the same time as everyone else to with either through build or buy. The main reason for doing as much building now is to have a sizable patent portfolio for defensive reasons. Google bought Motorola's patents to protect them while they competed with Apple. With this in mind, how does anyone else compete without burning through far more money trying to gain market share. Uber burned through the money trying to be efficient when the market was much smaller. Once the market is much much larger, any competitor will have to burn through a orders of maginitude more cash to buy market share. There's a lot more to succeeding in this market than self driving cars.
NamTaf 9y ago
For that all you need to do is check the price difference between renting for a day or getting taxi for a day There's also the burden of convenience. A taxi is an instant, summonable affair that ends completely with the trip. A hire car has to be hired and returned to a specific location, you have to stow it during your hire period and you have to fuel it. Beyond the tangible costs of fuel, parking, etc. there's also the opportunity cost. For exmaple, people will pay for convenience of a car to pick them up and take them home when drinking, and they may only need the hire car for a couple of 10 minute bursts but you can't hire a car for less than a 24 hour period. Both of those help buoy the cost of a taxi. I'm not suggesting you're wrong, but it's not as simple as [hire car] + [driver] = [taxi] from a cost perspective.
- timewarrior 9y ago
  I agree it's not the same from the user point of view. However from Uber's point of view - cost of 24 hours to rental company vs cost of 24 hours of taxi+driver would probably be a good approximation to get an idea of the order of saving which might make owing self driving cars feasible for Uber vs their current business model.
- pricechild 9y ago
  I don't think that's necessarily true... but I don't think anyone's cracked it yet either. There's https://www.car2go.com https://www.car2go.com which ran for a year or so in my city but has since shut down. You could leave the car within the bounds of the city. There are also various bike schemes with a similar idea?
  - ghaff 9y ago
    Car schemes exist like Zipcar. I know people who live in cities and don't own a car who use them all the time. But it's turned out to be a pretty niche business. Zipcar is the highest profile of these businesses, at least in the US, AFAIK and even they ended up bought by Avis. I suspect that with all the VC money subsidizing Uber et al, for most people the gap between regular rentals for a day+ and just calling an Uber isn't large.
ForHackernews 9y ago
> Whoever gets self driving technology right, will own all transportation and logistics - which is huge! Why? Presumably others will develop self-driving technology too, and then ground transportation becomes an interchangeable commodity that competes on price. It's not like there's only one container-ship firm in the world.
celticninja 9y ago
In addition they need the law to allow them to have driverless vehicles, right now these vehicles need a human driver 'just in case' with that expense autonomous vehicles will struggle against their traditional rivals. Where uber have an issue so that whilst Google can wait for the laws to allow for it Uber can't burn money for that long.

bduerst 9y ago

I think Matt Levine succinctly said it best: >Eventually there will be self-driving cars, and there's no special reason to think that Uber will be the best at building them, or that its dominant position in the ride-hailing-app space will protect it from better self-driving-car businesses.

timewarrior 9y ago
Agreed. Unless they have a monopoly on self driving technology (which I seriously doubt). On the other hand, I feel that we will not have self driving cars for a really long time. Instead I believe we will have flying cars before that, who will solve the last mile problem. They will take you from the house to the hub and hub to the final destination. Buses can transport people between hubs. With self driving cars you need to deal with existing regulations, traffic rules, other drives on road, people jaywalking, animals running into you. However with flying cars - you literally have exponentially more roads in air (which don't even have to be built). No existing regulations (unless at risk of being in flight path). Technology is already there (make drones bigger). These drones will communicate using MESH networks leading to lesser risk of collisions. I also feel that Elon Musk is doing something really smart with The Boring Company. If he can dramatically reduce the cost of building tunnels (like he did with space travel) - he could build a lot of underground roads at a lower cost and faster pace than roads on surface. No need to deal with buying out land and getting approvals. Imagine if these tunnels are exclusive to Tesla cars, who can auto-drive these tunnels for long distances. No need to worry about other cars, animals, rain, snow, traffic regulations. All the problems that auto driving cars are facing now, will go away. Multiple Tesla cars will communicate with each other using MESH network. Teslas could be driving in these tunnels at 150+ mph and discharged cars could be swapped with charged cars on the way. Drivers might need to take over minimally just for the last mile. If a tunnel like this could be built between SF to LA. It could be faster door to door vs flight. To get started, a tunnel from SF to really South Bay could have an huge impact on the commute. I do not have much experience of these industries. So these are my hypotheses. Would love to know what others think!
- enraged_camel 9y ago
  >>On the other hand, I feel that we will not have self driving cars for a really long time. Instead I believe we will have flying cars before that, who will solve the last mile problem. We already have flying cars. They are called helicopters, and they are only available to various government agencies, large corps and the rich.
- abpavel 9y ago
  > No existing regulations (unless at risk of being in flight path). Obviously you haven't had your flight lessons yet. Not only there are scores of airspace regulations, but flying is a much harder task to do as well. The freedom you're thinking off is akin to freely driving in a 4x4 on an open ranch, which has more to do with joy, and less with transportation needs.
  - deleted 9y ago
    [deleted]
- Animats 9y ago
  tunnel from SF to South Bay I have a copy of the 1960 U.S. Corps of Engineers plan for the Bay Area. It totally predates environmentalism, and they were thinking big. They proposed five freeways on the SF peninsula - US 101, I-280, CA-1, CA-35, and one out in the bay on stilts. There's a second Bay Bridge at Candlestick. The area south of the Dumbarton bridge was to be filled in and developed. Marin was planned as a heavy industry center, with steel mills at Tiburon. There was considerable WWII heavy industry in the north bay, including big shipyards, and the Corps thought that would grow, not shrink. The SF peninsula would be a center for "business machines". They got that right.
- nihonde 9y ago
  I would settle for a system that takes over control of otherwise regular cars on highways and in congested areas.

SilasX 9y ago

But note that Uber doesn't become superprofitable from SDCs unless they're the only ones with them; otherwise, they have to cut prices in line with the other SDC-ride-hailing apps. Even under an optimistic scenario, might have a two-year SDC monopoly, after which others can offer the same product. That's still not nearly long enough to justify the valuation.

yawaworht12 9y ago
No company is going to have a monopoly of self driving cars. Uber just needs to get them at the same time as everyone else to with either through build or buy. The main reason for doing as much building now is to have a sizable patent portfolio for defensive reasons. Google bought Motorola's patents to protect them while they competed with Apple. With this in mind, how does anyone else compete without burning through far more money trying to gain market share. Uber burned through the money trying to be efficient when the market was much smaller. Once the market is much much larger, any competitor will have to burn through a orders of maginitude more cash to buy market share. There's a lot more to succeeding in this market than self driving cars.

NamTaf 9y ago

For that all you need to do is check the price difference between renting for a day or getting taxi for a day There's also the burden of convenience. A taxi is an instant, summonable affair that ends completely with the trip. A hire car has to be hired and returned to a specific location, you have to stow it during your hire period and you have to fuel it. Beyond the tangible costs of fuel, parking, etc. there's also the opportunity cost. For exmaple, people will pay for convenience of a car to pick them up and take them home when drinking, and they may only need the hire car for a couple of 10 minute bursts but you can't hire a car for less than a 24 hour period. Both of those help buoy the cost of a taxi. I'm not suggesting you're wrong, but it's not as simple as [hire car] + [driver] = [taxi] from a cost perspective.

timewarrior 9y ago
I agree it's not the same from the user point of view. However from Uber's point of view - cost of 24 hours to rental company vs cost of 24 hours of taxi+driver would probably be a good approximation to get an idea of the order of saving which might make owing self driving cars feasible for Uber vs their current business model.
pricechild 9y ago
I don't think that's necessarily true... but I don't think anyone's cracked it yet either. There's https://www.car2go.com https://www.car2go.com which ran for a year or so in my city but has since shut down. You could leave the car within the bounds of the city. There are also various bike schemes with a similar idea?
- ghaff 9y ago
  Car schemes exist like Zipcar. I know people who live in cities and don't own a car who use them all the time. But it's turned out to be a pretty niche business. Zipcar is the highest profile of these businesses, at least in the US, AFAIK and even they ended up bought by Avis. I suspect that with all the VC money subsidizing Uber et al, for most people the gap between regular rentals for a day+ and just calling an Uber isn't large.

ForHackernews 9y ago

> Whoever gets self driving technology right, will own all transportation and logistics - which is huge! Why? Presumably others will develop self-driving technology too, and then ground transportation becomes an interchangeable commodity that competes on price. It's not like there's only one container-ship firm in the world.

celticninja 9y ago

In addition they need the law to allow them to have driverless vehicles, right now these vehicles need a human driver 'just in case' with that expense autonomous vehicles will struggle against their traditional rivals. Where uber have an issue so that whilst Google can wait for the laws to allow for it Uber can't burn money for that long.